The IMF goes to war in Ukraine

Pepe Escobar is the roving correspondent for Asia Times/Hong Kong, an analyst for RT and TomDispatch, and a frequent contributor to websites and radio shows ranging from the US to East Asia. Born in Brazil, he's been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Even before 9/11 he specialized in covering the arc from the Middle East to Central and East Asia, with an emphasis on Big Power geopolitics and energy wars.
He is the author of 'Globalistan' (Nimble Books, 2007), 'Red Zone Blues' (Nimble Books, 2007), 'Obama does Globalistan' (Nimble Books, 2009) and a contributing editor for a number of other books, including the upcoming 'Crossroads of Leadership: Globalization and the New American Century in the Obama Presidency' (Routledge). When not on the road, he alternates between Sao Paulo, New York, London, Bangkok and Hong Kong.

It’s essential to identify the conditions attached to this
Mafia-style “loan.” Nothing remotely similar to reviving
the Ukrainian economy is in play. The scheme is inextricably
linked to the IMF’s notorious, one-size-fits-all “structural
adjustment” policy, known to hundreds of millions from Latin
America and Southeast Asia to Southern Europe.

The regime changers in Kiev have duly complied, launching the
inevitable austerity package – from tax hikes and frozen pensions
to a stiff, over 50 percent rise on the price of natural gas
heating Ukrainian homes. The “Ukrainian people” won’t be
able to pay their utility bills this coming winter.

Predictably, the massive loan is not for the benefit of “the
Ukrainian people.” Kiev is essentially bankrupt. Creditors
range from Western banks to Gazprom – which is owed no less than
$2.7 billion. The “loan” will pay back these creditors;
not to mention that $5 billion of the total is earmarked for
payments of – what else – previous IMF loans. It goes without
saying that a lot of the funds will be duly pocketed –
Afghanistan-style – by the current bunch of oligarchs aligned
with the “Yats” government in Kiev.

The IMF has already warned that Ukraine is in recession and may
need an extension of the $17 billion loan. IMF newspeak qualifies
it as “a significant recalibration of the program.” This
will happen, according to the IMF, if Kiev loses control of
Eastern and Southern Ukraine – something already in progress.

Eastern Ukraine is the country’s industrial heartland – with the
highest GDP per capita and home of key factories and mines,
mostly in the Donetsk region, which happens to be largely
mobilized against the neo-fascist/neo-nazi-aligned regime
changers in Kiev. If the current conflagration persists, this
means both industrial exports and tax revenues will go down.

So here’s the IMF prescription for the oligarch bunch – some of
them actively financing Right Sector militias: As long as you’re
facing a popular rebellion in Eastern and Southern Ukraine,
relax; you will get additional IMF cash further on down the road.
Talk about a crash course in disaster capitalism.

We want you to invade

Meanwhile, the Obama administration’s juvenile delinquent school
of diplomacy remains on track: the plan is to entice Moscow to
“invade.” Benefits would be immense. Washington would
destroy once and for all the emerging strategic partnership
between the EU, especially Germany, and Russia, part of a more
organic interaction between Europe and Asia; keep Europe
perennially under America’s thumb; and boost Robocop NATO after
its Afghan humiliation.

Well, they are not juvenile delinquents for nothing. Yet this
brilliant plan forgets a key component: enough competent troops
willing to apply Kiev’s designs. The regime changers dissolved
the Berkut federal riot police. Big mistake – because they are
pros; they are unemployed; and now, holding a monster grudge,
amply supporting Ukrainians in favor of federalization.

What the Ministry of Truth script imposed on all Western
corporate media insists on labeling “pro-Russian
separatists” are in fact Ukrainian federalists. They don’t
want to split. They don’t want to join the Russian Federation.
What they want is a federalized Ukraine with strong, autonomous
provinces.

Meanwhile, in Pipelineistan…

Washington is actively praying that the confrontation between the
EU and Russia on the gas front spirals out of control. Natural
gas will amount to 25 percent of the EU’s needs up to 2050. Since
2011 Russia is the number one supplier, ahead of Norway and
Algeria.

The bureaucrat-infested European Commission (EC) is now
concentrating its attacks on Gazprom on the South Stream pipeline
– whose construction starts in June. The EC insists that the
agreements already struck between Russia and seven EU countries
infringe the laws of the EU (how come they didn’t find that out
earlier?). The EC would like South Stream to become a
“European,” not a Gazprom project.

Well, that depends on a lot of serious diplomacy and the internal
politics of various EU member states. For instance, Estonia and
Lithuania depend 100 percent on Gazprom. Some countries, such as
Italy, import over 80 percent of their energy; others, such as
the UK, only 40 percent.

It’s like the EC suddenly woke up from its usual torpor and
decided that South Stream is a political football. Günther
Oettinger, the EU’s energy commissioner, has been blaring the
horn of EU competition laws called “the third energy
package” – which would essentially require Gazprom to open
South Stream to other suppliers. Moscow filed a complaint to the
World Trade Organization (WTO).

Rigorous application of recently unearthed EU law is one thing.
Facts on the ground are another. South Stream may cost up to 16
billion euros – but it will be built, even if financed by
Russia’s state budget.

Moreover Gazprom, in 2014 alone, has already signed extra deals
with German, Italian, Austrian and Swiss partners. Italy’s ENI
and France’s EDF are partners from the start. Germany, Italy,
Bulgaria, Hungary and Austria are deeply involved in South
Stream. No wonder none of them are in favor of more sanctions on
Russia.

As for any substantial move by the EU to find new supply sources,
that’s a process that should take years – and should involve the
best possible alternative source, Iran, assuming a nuclear deal
with the P5+1 is struck this year. Another possible source,
Kazakhstan, exports less than it could, and that will remain the
case because of infrastructure problems.

So we’re back to the Ukrainian tragedy. Moscow won’t
“invade.” What for? The IMF’s structural adjustment will
devastate Ukraine more than a war; most Ukrainians may even end
up begging Russia for help. Berlin won’t antagonize Moscow. So
Washington’s rhetoric of “isolating” Russia is just
revealed for what it is: juvenile delinquency.

What’s left for the Empire of Chaos is to pray for chaos to keep
spreading across Ukraine, thus sapping Moscow’s energy. And all
this because the Washington establishment is absolutely terrified
of an emerging power in Eurasia. Not one, but two – Russia and
China. Worse: strategically aligned. Worse still: bent on
integrating Asia and Europe. So feel free to picture a bunch of
Washington angry old men hissing like juvenile delinquents:
“I don’t like you. I don’t want to talk to you. I want you to
die.”

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.